Long-running water war heading to New Mexico Supreme Court

SANTA FE - Some water disputes in the West never seem to end, but one of New Mexico's long-running battles may be entering its final round.

The state Supreme Court on Dec. 10 will hear arguments in the case of Moongate Water Co. versus the city of Las Cruces, a fight over territory and customers.

Legal conflicts between Moongate and the city date to 1986. Moongate sued the city that year, alleging violations of state and federal antitrust laws.

The case now heading to the New Mexico Supreme Court also is one with a history stretching back three decades.

Public utility regulators in 1984 gave Moongate permission to provide water service in an unincorporated section near Las Cruces. In that era before explosive growth, the city declined to provide the service outside its borders, according to a brief filed with the Supreme Court by Moongate.
Much of Moongate's service area - which covered the subdivisions of Dos Suenos, Los Enamorados and Rincon Mesa - later was annexed by the city.

Las Cruces then offered water service to those neighborhoods. Moongate sued the city for invasion of territory.

A centerpiece of the case is whether the certificate of convenience and necessity that Moongate received from state regulators grants it exclusive service rights.

In the last three years, the case has been before a district judge and the state Court of Appeals. The city largely prevailed in the appeals court.

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But now the arguments must be made again, this time before New Mexico's highest court.

Moongate, in its brief filed with the Supreme Court, says it is entitled to compensation for the city's taking of customers.

In their response, lawyers for Las Cruces said Moongate was not entitled to damages. The city said Moongate failed to show economic harm.

These adversaries had an agreement that covered part of their competition.

When a customer switched service from Moongate to the city, the city would pay the company for meter boxes, pipe connections and portions of the service line.

But in their brief, city lawyers said the agreement mentioned nothing about compensation for Moongate's loss of customers.

Moongate counters that a municipality cannot take over the company's territory unless it submits to supervision by the state Public Regulation Commission or through its power of eminent domain - the purchase of private property for the public good.

Because it received authorization from state regulators all those years ago to provide water to a place in need, Moongate says it has an exclusive right and a property right to the market.

Though the Supreme Court is about to hear the case, it probably will be several months to a year before the five justices announce a decision.

Milan Simonich, Santa Fe bureau chief of Texas-New Mexico Newspapers, can be reached at msimonich@tnmnp.com or 505-820-6898. His blog is at nmcapitolreport.com

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